Many professions have adopted a series of ethical standards to provide guidance for their memberships.The Institute of Management Accountants (IMA), for example, has published standards that focus on competence, conﬁdentiality, integrity, and credibility.In light of these standards, consider the three cases that follow. Case A-Leston Corporation has experienced serious ﬁnancial diﬃculties in recent years.John Young, the company's chief ﬁnancial oﬃcer, has just learned that a major competitor was likely to ﬁle for bankruptcy; however, he failed to disclose this information at a board meeting held later that day when a plant closure decision was being discussed.The board evaluated several proposals during the session that focused on improving Leston's ﬁnancial position. Case B-QBX Company manufactures fertilizer from various raw materials, including a raw material know as Felstar.Paul Kelly, the ﬁrm's purchasing manager, purposely acquired a lower grade of Felstar than normal because of a very attractive price.The lower-grade product resulted in increased usage during the manufacturing process but had no effect on the fertilizer's overall quality.An end-of-period report showed that QBX proﬁted from Kelly's actions, with the overall savings in purchase price more than offsetting the cost of added consumption. Case C-Central Distributing has a participative budgeting process, allowing employees to have a say in projected sales targets for the upcoming period.These targets are reﬂected in a series of performance reports that compare actual sales achieved against targeted amounts.Hillary Baxter submitted very low sales targets because, as she conﬁded in a colleague, "I always want to look good in terms of meeting targets, even if anticipated sales and closures don't materialize." Required: Evaluate the three cases and determine the ethical issues, if any, which are involved.Cite the IMA's standards if appropriate.

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The Answer of Many professions have adopted a series of ethical standards to provide guidance for their memberships.The Institute of Management Accountants (IMA), for example, has published standards that focus on competence, conﬁdentiality, integrity, and credibility.In light of these standards, consider the three cases that follow. Case A-Leston Corporation has experienced serious ﬁnancial diﬃculties in recent years.John Young, the company's chief ﬁnancial oﬃcer, has just learned that a major competitor was likely to ﬁle for bankruptcy; however, he failed to disclose this information at a board meeting held later that day when a plant closure decision was being discussed.The board evaluated several proposals during the session that focused on improving Leston's ﬁnancial position. Case B-QBX Company manufactures fertilizer from various raw materials, including a raw material know as Felstar.Paul Kelly, the ﬁrm's purchasing manager, purposely acquired a lower grade of Felstar than normal because of a very attractive price.The lower-grade product resulted in increased usage during the manufacturing process but had no effect on the fertilizer's overall quality.An end-of-period report showed that QBX proﬁted from Kelly's actions, with the overall savings in purchase price more than offsetting the cost of added consumption. Case C-Central Distributing has a participative budgeting process, allowing employees to have a say in projected sales targets for the upcoming period.These targets are reﬂected in a series of performance reports that compare actual sales achieved against targeted amounts.Hillary Baxter submitted very low sales targets because, as she conﬁded in a colleague, "I always want to look good in terms of meeting targets, even if anticipated sales and closures don't materialize." Required: Evaluate the three cases and determine the ethical issues, if any, which are involved.Cite the IMA's standards if appropriate.

Many Professions Have Adopted a Series of Ethical Standards to Provide